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Monday, March 6, 200
Monday morning started off with our first company
visit. Since technically we are supposed
to be learning about doing business in China, and not just taking
vacation, the school set up visits to several different companies.
After breakfast, we boarded the bus and drove to
Bama. Bama is an American company based
out of Tulsa. Their main product is the apple pies for
McDonald’s. When McD’s moved into China,
asked Bama to come with them. This was a
really good idea for McD. They wanted to
be able to maintain the same quality of food at all of their
over the world. Importing from their
reputable, hand-picked suppliers in the US was too expensive. They needed everything to be produced
locally. For some items, McD found local
suppliers. For other things, they asked
the suppliers to set up locations around the world.
On the way to Bama, we passed miles and miles of
all government housing complexes. The
Bama building was located in front of a very new housing complex. It was obviously privately owned.
It looked like a townhouse development right
out of the American suburbs. There was
even a flashy billboard in front of it, advertising that there were
available. I did not ever see anything
like this anywhere else in Beijing.
Bama was located in a small, free-standing
building. We were led into a conference
room by a
Chinese woman who spoke perfect English.
After we were seated, a tall, curly-haired American man of about
years old walked in and greeted us. He
was Bernie Sheridan, the General Manager of Beijing Bama.
(Genreal Manager is the same thing as a CEO
Bernie had been living in China
for about 17 years. He spoke fluent
Mandarin. He used to work for McDonald’s
in China. McD wanted to send him back to the US,
didn’t want to go. He offered to help
get Bama up and running in Beijing. Bernie was out-going and charismatic, and
loved his job, his employees, and China in general.
Beijing Bama was founded about 6 years ago. About $12 million US had been invested in
building the factory – and it would have cost three times that much to
similar facility in the US. When
the plant first opened, they had only
one pie line. They have since added an
At first, Bama made only apple pies.
Apple pies were not a big seller in China. It’s just not something that the Chinese
people are used to. McD did some market
research and recommended some other flavors for Bama.
Today, their biggest seller is taro pie. Taro
root is kind of similar to a sweet
potato, but it’s purple. Their
second-biggest seller is pineapple. They
also sell chicken, tuna, and several other flavors of fruit pies. I sampled the pineapple, and it was very
good. I am assuming that the meat pies
are not sweet – they are probably more like a pot pie or a Hot Pocket. The pies sold in China
are still deep-fried, unlike the ones in the US,
which are now baked.
Bama now sells products to companies other than
McD. They make pocket-type pies for
companies in China. They also have a line of baked goods such as
cakes and breads. The cake and bread
business is still very small. All of
those items are still made by hand in a giant kitchen.
Bernie took us on a tour of the plant. Their pie line was not running that day, so
the plant floor was very quiet. We had
to wear lab coats and hair covers, although we did not need shoe
gloves, or masks, as would be required in a drug plant.
The pie line itself looked very similar to any
pharmaceutical manufacturing line I’ve seen.
Lots of stainless steel equipment, large tanks, a filling line
conveyer belt. Bernie showed us how the
raw materials are taken from a huge refrigerated warehouse, loaded onto
conveyer belt, and poured into a huge mixing tank.
Pie shell ingredients go into one tank;
filling ingredients go into another.
After mixing, the pie shell dough is extruded onto a moving
belt. Filling is extruded onto it, then
another layer of pie dough is added. The
individual pies are cut apart, deep fried, and flash-frozen before
I have seen many plants like this, but this was
plant tour for many of the people in the class.
Everyone had a million questions, and Bernie was very good about
answering all of them.
One thing I found interesting was that the plant
had its own
well-water supply. At drug plants in the
municipal water is usually purified for use in drug manufacturing. This is not really an option in Beijing. I don’t know if I mentioned this before, but
you can’t drink the tap water in Beijing
– not even to brush your teeth. The
locals can’t drink it either. Everyone
drinks and cooks with bottled water. A
gallon of water costs more than a gallon of milk in Beijing.
Bama would not have been able to cost-effectively purify tap
started out that dirty, so they drilled their own well, far below the
contaminated water table used by the city.
After the plant tour, we returned to the
conference room and
had a chance to sample some of the different pies.
Bernie told us how he had built a world-class
company in China. He was very devoted to his employees. He paid above the median wage, and offered
them plenty of career development opportunities. He
was the only ex-pat working for the
company – everyone else was Chinese. I
was very impressed with Bernie and his company.
He really had a nice little organization set up there. When we left, he gave us each a Bama Beanie
After the Bama visit, the bus dropped us off at
and we were left to find lunch on our own.
recommended a noodle shop a few blocks away from the hotel. Margaret, Kris, Jamie and I walked
there. The noodle shop was small, and
set up like a fast-food restaurant. The
girl working at the counter did not speak English.
She brought out a menu that was written in
English so that we could point to which item we wanted.
However, the menu didn’t give a description
of the item; just the name. I ordered
plain chow mein, not really sure what I would get.
Kris was not so adventurous. She
wanted to know what was in each
dish. She kept asking the poor counter
girl over and over, but she just didn’t understand.
Kris was getting frustrated and started
yelling at her. Finally, a manager who
spoke a (very) little English came out. Kris
was finally able to order, but as we walked to the table, she continued
My chow mein turned out to be spaghetti noodles in
sauce with onions and green peppers. It
was pretty good, and was a huge serving.
I’d paid about $2 for it. Kris
was mildly happy with her lunch, although she continued to complain
wasn’t exactly what she wanted.
After lunch, I wanted to find a place where I
could buy a
small notebook. Somehow I’d forgotten to
bring my leather notepad, and I didn’t have anything to take notes with
meetings. I wanted to stop in a drug
store and pick one up, but Kris said she’d been in a drug store the day
and all they had was drugs. We walked by
a mall on the way back to the hotel, and I decided to stop there. I didn’t end up finding a notebook, but I did
find something interesting – a dollar store.
Actually, it was a 10 Yuan store.
Ten Yuan is about $1.25. I
wandered around in there looking at all the stuff.
It was very similar to an American dollar
store – everything from cleaning supplies to shampoo to underwear. But of course, all the brands were weird and
all the packaging was printed in Chinese.
In the afternoon, we went to the US
embassy to meet with someone
from the Commerce Department. The
embassy office was located in a large office building.
We had to show our passports to get in. The
embassy seemed to be staffed mostly with
English-speaking Chinese. We were led
into a conference room and left there by the receptionist.
We waited for a long time. At first
we didn’t talk much, but then we
started getting a little silly. Someone
wondered whether the Chinese government was taping everything we were
Finally, the guy we had come to see arrived (I
remember his name). He didn’t seem like
he wanted to be there. He was an
American working for the Commerce Department, and was on a 4-year
Beijing. His office helped American companies get
established in China. They only worked with American companies that
wanted to export goods to China;
not companies that wanted to manufacture in China
and import into the US. They do market research and provide local
contacts and things like that.
We asked him a few questions about how one would
breaking into the Chinese market. His
answer to just about every question was, “Well, that’s outside our area
expertise. You’d have to hire a private
for that.” Finally, I asked him, “What
is the advantage of working through your office rather than just going
a private consultant to begin with?” He
replied, “Well, we’re cheaper. We do
charge a fee for our services, but it’s nominal. Also,
we can provide some assistance in
dealing with the Chinese government if needed.”
I asked, “Do you keep any metrics?
Do you know if you’re actually helping any
companies?” He said, “Yes, we keep track
of which companies have consulted with us.”
I prodded further, “But how do you track whether you actually
difference, or if those companies would have figured things out in China
At that point, Phil interrupted me and brought the
to a close.
I have a big problem with this whole thing. Providing assistance in dealing with the
government is one thing, but I don’t feel that doing market research in
is a good
use of my tax dollars. I don’t think
this office has any place in the US government.
I mentioned this to some of my classmates
after we left. Most of them disagreed
with me. They felt that hiring private
consultants would be too expensive for small companies, and working
Commerce Department would be the only way for them to break into the
market. Based on what we’d heard at the
meeting, I really didn’t get the impression that the Commerce
helping anyone break into the Chinese market.
They seemed to be in the business of charging fees to give
Furthermore, I don’t believe that the government
paying for something just because you can’t afford to buy it on your
own. Again, my classmates disagreed. I go to school with a bunch of socialists.
After learning about the socialist nature of the US
we stopped at a market to witness Chinese capitalism in action. The market was located in a gigantic 7-story
building. Each floor was dedicated to a
different type of merchandise. High-end
jewelry was on the top floor, then costume jewelry, purses, housewares,
clothing. All of the purses and watches
and clothing were designer knock-offs.
Each floor was set up in a grid
with a single seller
occupying each square of the grid. It
was extremely crowded. As we walked down
the aisles, the sellers were constantly saying, “Hello, hello, lady. Lookie!
You want to buy purse? I have
Coach, Gucci, good quality!” It never
stopped and they wouldn’t take no for an answer. Mitesh
and Manzoor became infatuated with
some fake Rolexes. They spent hours at
the watch counter, and eventually walked away with about 30 watches for
80 Yuan each – about $10.
I spent a long time wandering
around, but didn’t buy
much. I really wanted a new fake Prada
purse, but couldn’t find one. One girl
told me that it had gotten “too dangerous” to sell Prada, but tried to
into a Louis Vitton instead.
Shopping at that market was
really exhausting. I was so tired of being
harassed by the
sellers by the time we left.
I got down to the bus about 15
minutes early. Jaime was there, and
mentioned that he had
just eaten a sandwich from the Subway across the street.
He and I walked back over there and got two
Tsing Tao beers to go for a total of $3.
You gotta love Beijing.
Go to March 7